Thriller Options

Wednesday · Sep 16

What’s on the clock

8:30 printed hot. 2:00 is the paper. 2:30 is the show. Retail +1.2% vs +0.8% (control +1.4%). Does not stop the hike. It can make the 2026 dots more hawkish.

7:00
Out
MBA mortgage applications
missLow
Cons.
—
Prior
−2.7%
Print
−4.1%
OUT. −4.1% vs −2.7% prior. Purchase −1%, refi −9%. 30-year hit 6.97% last week and ~7.22% now. Housing is already tightening — color for NAHB / Lennar, not the hike.
8:30
Out
Retail sales (Aug)
beatHigh
Cons.
+0.8%
Prior
−0.5%
Print
+1.2%
OUT. Hot beat. $773.9B, +1.2% vs +0.8% cons. July revised to −0.5% from −0.6%. YoY +6.0%. Ex-auto & gas +1.2% vs +0.3%. Does not cancel the hike. Bids 2s into 2:00. Lets 2026 dots drift hawkish.
8:30
Out
Retail sales ex-autos
beatHigh
Cons.
+0.5%
Prior
−0.3%
Print
+1.4%
OUT. +1.4% vs +0.5% cons. Demand ex-autos is hot, not a rebound blip.
8:30
Out
Retail control group
beatHigh
Cons.
+0.4%
Prior
−0.4%
Print
+1.4%
OUT. Control (ex-autos, gas, building materials, food services) +1.4% vs +0.4% cons. Feeds Q3 PCE. Demand is not cooling. Soft-control sentence is off the table for Warsh.
8:30
Out
Import prices (Aug)
beatMed
Cons.
+0.4%
Prior
−0.4%
Print
+0.7%
OUT. +0.7% vs +0.4% cons. Nonfuel +0.8%. Fuel −0.1%. YoY +7.0%. Inflation pipeline hotter — stacks on the retail beat.
8:30
Out
Export prices (Aug)
beatMed
Cons.
+0.4–0.5%
Prior
−1.3%
Print
+0.6%
OUT. +0.6% after −1.4%. Confirms goods-price direction is up, not a one-off.
10:00
Out
Business inventories (Jul)
beatLow
Cons.
+0.6%
Prior
0.0%
Print
+0.8%
Low impact GDP plumbing.
10:00
Out
NAHB housing market index (Sep)
missLow
Cons.
34
Prior
35
Print
32
Housing names, then Fed financial-conditions language, then Lennar.
10:30
Out
EIA crude / products
missMed
Cons.
−1.6M
Prior
−0.4M
Print
−0.64M
OUT: crude −0.64M vs −1.6M. Smaller draw than expected. Gasoline +0.79M vs −1.0M. Distillates +1.59M vs +0.1M. Cushing −0.34M. API had +7.1M; EIA is a small draw but products built. WTI −2% to ~$104. Still the inflation input — Saudi pipeline remains shut.
2:00
ET
FOMC decision + SEP
Max
Cons.
+25 bp priced
Prior
3.50–3.75%
—
—
Statement + implementation note + SEP + dot plot. Do not fade the first 30–60 seconds of the statement until the dots are on the screen. First print after 2:00 is often wrong. Wait for the SEP table.
2:30
ET
Chair Warsh press conference
Max
Cons.
—
Prior
—
—
—
The real session. Size the 2:00 slot small; size 2:30–3:00 as the trade. He will not give a sequence of hikes.
4:00
ET
TIC flows (Jul)
Low
Cons.
—
Prior
—
—
—
Low impact. Foreign official demand color for the long end.
A/C
ET
Lennar (LEN) earnings
Med
Cons.
—
Prior
—
—
—
After the close. Housing stacked on Fed + retail + NAHB.

The meeting

Wednesday, in plain English

The Fed sets the overnight rate. They just raised it to 3.75–4.00% (12–0). Statement is mute on the path. Dots: 2026 4.1%, 2027 4.1%. Chair Warsh takes questions at 2:30. Raised +25 bp Sep 16 — first hike since July 2023.

Meeting: Sep 16
Statement: OUT · 2:00 PM ET
Warsh Q&A: LIVE · 2:30 PM ET
Minutes: Oct 7
Target: 3.75–4.00%
Last hike: Sep 16, 2026 · +25 bp

Market pricing

Raise 0.25%OUT

Hold ratesDidn’t print

Cut, or raise 0.50%0%

These are futures-market odds (CME FedWatch), not a forecast. July’s vote was a 9–3 hold — three officials already wanted a hike. HIKE +25 to 3.75–4.00%, unanimous 12–0. Statement is mute on Oct/Dec and dropped July’s “supply shocks / energy” attribution — inflation is treated as broad. New line: “Today’s policy action will support a timelier return to the 2 percent goal.” SEP: 2026 median 4.1% (12 see one more hike, 4 see two, 2 stay). 2027 4.1% (no cuts). Warsh did not submit a dot. Core PCE 3.4 vs June 3.3. Stocks ground through 760; 10s −5 bp. Presser is the second move. 4.1% 2026 median after a hike to 3.875% midpoint = one more 25 bp by year-end. 2027 stuck at 4.1% = hold high, no cuts.

What to read, in this order

01
The statement · 2:00
The words. First 30–60 seconds are noisy — wait for the rate-forecast table before you react.
02
The dots · 2026 median
Each official’s rate forecast. 3.9% = this hike, then probably done. 4.1% = another hike this year. 3.6% = hike, then cuts.
03
The vote
Unanimous is clean. Dissenters tell you whether Warsh dragged the center or the hawks still want more.
04
The press conference · 2:30
This is where markets actually move. Size 2:00 small. Size 2:30–3:00 as the session.

Don’t trade the first 30–60 seconds of the statement. Wait until the dots are on the screen.

“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”
Warsh, Jackson Hole

“Markets should price the data, not the Fed’s reaction function.”
Warsh, Fed Chair

A closer look

Five things that can still move markets

If this happens

How markets usually react

Green arrow = that number goes up. Red = it goes down. Yields up means bond prices fall. Ranges below the arrows are typical first-hour moves — not a recommendation.

How the tape usually moves

Six dials. One ending.

2-year

Little change

10-year

Can ease

SPY

+0.25 to +0.75%

Dollar

Small firm to flat

Gold

Mixed

Dots

3.9 look

At 2:00 they either raise 0.25% (almost everyone), hold (the shock), or raise 0.50% (almost no one).

Raise 0.25%

Base case

~90%

StocksDown

Bond yieldsUp

DollarUp

2-year Little change — hike is already priced. S&P S&P +0.25% to +0.75% if dots look one hike · flat to down if 2026 still hikes.

Hold rates

The shock

~10%

StocksUp

Bond yieldsDown

DollarDown

2-year 2-year −12 to −25 bp. S&P S&P +1.0 to +2.0% squeeze.

Raise 0.50%

Near zero

~0%

StocksDown

Bond yieldsUp

DollarUp

2-year 2-year +15 to +25 bp. S&P S&P −1.5 to −3.0%.

Hike / +25 bp: Raise the policy rate 0.25% (a quarter point).
Hold: Leave rates unchanged. The shock outcome.
Dots: Each Fed official’s rate forecast. The 2026 median is the path.
2-year / 2s: 2-year Treasury yield — the market’s bet on the Fed.
10-year / 10s: 10-year yield — mortgages and long rates.
S&P / ES: S&P 500 (futures). The broad stock market.
Nasdaq / NQ: Nasdaq 100. Big tech — more sensitive.
Dollar / DXY: US dollar index. Usually up if the Fed sounds hawkish.

Four stories

Match what prints, then use the ranges

Combine the decision, the 2026 forecast, and the tone. The first package is the one most people expect. The others are how you get paid — or hurt.

Warsh default

Hike + no guidance

StocksLittle

Bond yieldsLittle

DollarLittle

Raise 0.25%. Short, data-dependent statement.
No verbal path for Oct/Dec. He likely skips his own dot.
2-year little change. 10s can ease. Dollar flat.
Stocks +0.25% to +0.75% if dots look one-and-done. Flat to down if they still show 2026 hikes.

Path surprise

The hawk package

StocksDown

Bond yieldsUp

DollarUp

Raise 0.25%, forecast 4.1% or a thick 2026 cluster
“Further firming” in the statement
Warsh repeats Jackson Hole
2-year +8–15 bp, 10-year 5.10–5.20, dollar >100, S&P −1 to −1.5%, Nasdaq worse

Path relief

Hike to get it over with

StocksUp

Bond yieldsDown

DollarDown

Raise 0.25%, forecast 3.6–3.8%
No 2027 hikes
Warsh: conditions have already tightened
Front-end yields fall, curve steepens, stocks squeeze

Left tail

The hold

StocksUp

Bond yieldsDown

DollarDown

Hold + still-hawkish statement
Hawks dissent
Violent 2-year rally and stock squeeze
Then Warsh decides: reprieve, or just a delay

If 8:30 retail sales surprise

This morning: hot (+1.2% / control +1.4%)
That’s the print. Import prices +0.7% too. Hike stays 93%. 2-year yields tend to bid into 2:00. Another 2026 hike is easier to signal. Don’t fade the hike off this.
What hot retail does from here
Doesn’t change the 2:00 decision. Makes another hike later this year more likely. Watch 2s, not SPY, into the statement.
Empire State already missed (7.6)
Factory activity was weak. Markets are treating it as noise. Inflation and demand are still the constraint.

Six rules for Wednesday

01Retail printed hot. That does not stop a hike. It can change how many more hikes get signaled.
02Don’t bet against the hike itself. Do fade a second hike unless the forecast table forces you to respect it.
03The first stock-market tick after 2:00 is often wrong. Wait for the dots.
04Nasdaq usually gets hit harder than the S&P if they sound hawkish. Nasdaq leads if they hold or sound done.
05The 10-year yield is not a pure Fed bet — oil, midterms, and deficits matter too.
06Keep size small at 2:00. The real session is 2:30–3:00, when Warsh talks.

Same game. Different regime. Trade what they signal, not the headline hike.

They hiked. Dots are 4.1.

“Inflation is too high, and has been for too long.”

8:30 is data. 2:00 is paper. 2:30 is the show.

One step is priced. The sequel is the question.

756 is the line. 763 is the trend.

Hike + no guidance

Watch the arrow. That’s stocks.

Names, not just SPY

Tell the page what the Fed does

What did the 2026 forecast say?

How did the meeting end?

What did Warsh just say?

Check these off as you do them

Four pictures of Wednesday

Two paths. Stay with 756 and 763.

Hike + no guidance

Hike, and more

Hold

Trade here while we CHOP!

Wednesday game plan

Decision day

Match the ending, then use the ranges

What’s on the clock

MBA mortgage applications

Retail sales (Aug)

Retail sales ex-autos

Retail control group

Import prices (Aug)

Export prices (Aug)

Business inventories (Jul)

NAHB housing market index (Sep)

EIA crude / products

FOMC decision + SEP

Chair Warsh press conference

TIC flows (Jul)

Lennar (LEN) earnings

Wednesday, in plain English

Five things that can still move markets

How markets usually react

Raise 0.25%

Hold rates

Raise 0.50%

Match what prints, then use the ranges

Hike + no guidance

The hawk package

Hike to get it over with

The hold